Home > Resources > The Need for Disability Insurance with an Insurance Broker in Victoria, BC
The Need for Disability Insurance
When we think of our most valuable asset, I suppose our house comes to mind first, and then our vehicles. We would not go to sleep at night knowing our fire insurance was not paid for or drive on the road before insuring our brand new car.
But our most valuable asset is the very thing that pays for everything else – our ability to work. Yet too many people ignore the most important insurance we should own – long term disability insurance.
Consider that one in three people will be disabled for 90 days or longer at least once before age 65 and the average length of a disability that lasts over 90 days is 2.9 years.
Could you afford to take a holiday for three years without a pay check?
If you are one of the lucky ones that has disability insurance through your group plan at work you might be alright, but if not, or you are self-employed, it is time to think about insuring your most valued asset. And P.S., don’t rely on your ‘work safe’ insurance policy as your long term disability insurance plan; remember it only pays for accidents at work, leaving you uninsured for sickness and accident off the job. It’s like having fire insurance on your home that only pays if it burns down on a Sunday.
When considering long term disability insurance for yourself, there are several things to keep in mind and the price you pay will be dependent on several things. I will go through some of the most important aspects on purchasing disability insurance to help you familiarize yourself with the details.
First is-- how much do I need?
Consider all of your monthly expenses: mortgage, food, rent, utilities, loans, auto expenses, other insurance premiums, clothing, etc. You are allowed approximately 66% or your taxable income as a maximum benefit, but anything under that is your choice.
Second is-- how long does it pay?
You can purchase a plan that has a benefit period of two years, 5 years, 10 years, or to age 65. So the choice as to how long the money lasts is up to you.
Third is-- how long do I wait?
This means if you get sick tomorrow, how long do you wait before you receive your first cheque – 30 days, 60 days, 90 days or longer?
Fourth is-- definition of disability.
When you buy life insurance it is pretty easy to determine how you collect, however disability insurance is different. There are many different types of definitions or disability and each has a different premium. It is important to know which definition fits best with your occupation.
Fifth – other options.
Like buying a car disability insurance comes with many options that are important to your contract. They include things like:
- Cost of living increase
- Future income option
- Future savings option
- Partial disability benefit
- Return of premium
It is difficult in this text to go into all other details of the contract however my point is that before you sign on the line, get all the facts and details so you have a clear understanding of what it is you are buying and how it pays out. I meet many people that say they have insurance only to find out in the fine print it is accident only, or there are exclusions, or that the payout premium is very limited.
SPEAK WITH YOUR ADVISOR
For a thorough evaluation of your insurance needs, please speak with our advisor.